An unwinding of short interest could provide an additional boost
DraftKings Inc (NASDAQ:DKNG) stock is 0.3% higher to trade at $36.65 at last check, and sports a 35.9% year-over-year lead. Shares spent a good portion of October attempting — and failing — to conquer the $39 level, after a September rally fell short of the $43 level. Most recently, however, the security pulled back to a historically bullish trendline that may just be its ticket higher.
According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, DraftKings stock is now within striking distance of its 80-day trendline. Per White, four similar pullbacks occurred during the past three years. In the month after 75% of these signals, DKNG averaged an 6.5% gain. A comparable move would place shares just above $39.
Short sellers are already hitting the exits, but a continued unwinding of pessimism could keep tailwinds blowing for ANF. Short interest fell 3.7% in the last two reporting periods, yet the 24.84 million shares sold short still makes up 5.3% of the stock’s available float.